The government is providing support to the Sustainable Alternative Towards Affordable Transportation (SATAT) scheme launched six years ago to increase the adoption of compressed biogas (CBG) in the country.
Launched in October 2018, the scheme has seen commissioning of just 72 CBG plants against the target of 5,000 by 2023-24.
SATAT is a part of the central government's plan to increase the share of alternate fuels such as ethanol and CBG in the country’s total energy basket in order to become a net-zero emissions nation by 2070.
While the CBG target was not met due to the slowdown in economic activity during the COVID-19 pandemic and a lack of interest from investors, the government has received over 3,000 Letters of Intent from various Indian oil companies to set up CBG plants.
The government is currently working on providing competitive pricing for CBG and providing financial support for laying gas pipelines, said Gaurav Kedia, Chairman of the Indian Biogas Association. He added that the all-year availability of feedstock is another roadblock faced in biogas production, which the government is looking into.
“Waste may be available in the vicinity, but is it available to me all the time? If I want organic waste or MSW, is it available for the right price, at the right time, at the right quantity? These are all million-dollar questions. Especially from the agriculture perspective, it becomes more dicey because then you have to deal with a lot of different stakeholders. So, the Government of India, especially MoPNG (Ministry of Petroleum and Natural Gas), has already come out with a separate subsidy scheme,” said Kedia.
Compressed biogas is a green fuel produced from the decomposition of waste and biomass sources like agricultural residue and municipal solid waste. India’s energy requirements are highly dependent on imports, with over 85 percent of crude oil and nearly 50 percent of natural gas coming from overseas. The government intends to use biomass, widely and cheaply available in India, as a fuel to reduce this import dependency.
Govt’s financial support
Presenting the interim Budget in February, finance minister Nirmala Sitharaman said the government would provide financial assistance for the procurement of machinery to help in biomass collection.
The government has allocated Rs 564 crore for the procurement of biomass aggregation machinery for the period of FY24 to FY27. To offer financial assistance to CBG producers, the government has introduced a grant of up to 50 percent of the cost of machinery used to collect biomass, or a maximum of Rs 90 lakh per set, whichever is less.
CBG blending with CNG and PNG
To boost the offtake of CBG in the country, the government in November 2023 announced mandatory blending of CBG in compressed natural gas (CNG) and domestic piped natural gas (PNG) in a phased manner.
The government said the CBG blending obligation (CBO) would be voluntary till 2024-25, and the mandatory blending obligation would begin from FY26.
CBO would be kept at 1 percent, 3 percent and 4 percent of the total CNG/PNG consumption for FY26, FY27 and FY28, respectively. According to a government notification, CBO would be mandated at 5 percent from FY29. A central repository body (CRB) would monitor and implement the blending mandate.
Petroleum and Natural Gas Minister Hardeep Singh Puri in November 2023 said CBO would encourage investment of around Rs 37,500 crore and facilitate the establishment of 750 CBG projects by 2028-29.
The government has highlighted that the key objectives of the CBO are to stimulate demand for CBG in the city gas distribution sector, besides serving as import substitution for liquefied natural gas, thereby saving on foreign exchange
CBG plants planned by oil companies
Several energy companies in India including Reliance Industries Ltd (RIL), Indian Oil Corporation Ltd and Bharat Petroleum Corporation Ltd have pledged to set up CBG plants.
With the recent boost given to the sector, several companies have come up with individual targets to set up CBG plants. RIL is targeting to set up 100 CBG plants in the next five years, consuming 5.5 million tonnes of agri-residue and organic waste.
Biofuels, or bio-energy, are a form of energy generated from organic and agricultural materials known as biomass. Biofuels help in reducing emissions and have gained worldwide popularity, contributing to meeting net-zero carbon emission targets.
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